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Michigan Health Connect, Grand Rapids, and Great Lakes Health Information Exchange, East Lansing, have signed a letter of intent to merge operations. The result could be one of the largest health information exchanges in the nation, officials said.

The agreement is expected to be finalized by March 31.

Last year, the two organizations agreed to share electronic patient medical record information in a secure exchange.

Michigan Health and Great Lakes are the largest of six similar organizations in Michigan. More than 2,000 physician provider offices and 100 of the state's approximate 117 hospitals are members.

"Millions of Michigan residents will receive better care and achieve greater levels of personal health as a result of this merger," said Patrick O'Hare, board chair of Michigan Health Connect, in a statement.

"Combining the talent and resources of these two organizations makes perfect sense for Michigan at this time," he said.

The health information exchanges — not to be confused with the health insurance exchanges under health care reform — are intended to help make it easier for hospitals and physicians to exchange patient information, thereby achieving lower costs and higher quality by better coordinating care and reducing service duplication.

Sharing patient data will help hospitals across the state from lower Michigan to the Upper Peninsula, and hospitals in local markets.

"This is the right thing to do for our participating providers and their patients," said Brian McCardel, Great Lakes' board chairman, in a statement.

"This merger means that we can maximize collaboration between providers across Michigan through robust, integrated exchange of clinical information," he said.

If consummated, the merger would allow hospitals in the same city to more effectively share patient data and other information.

For example, the University of Michigan Medical Center in Ann Arbor is part of Great Lakes, and St. Joseph Mercy Hospital in Ann Arbor is a member of Michigan Health Connect.

In 2006, former Gov. Jennifer Granholm approved a plan to create nine sub-state health information exchanges — online databases that allow competing medical providers to instantly share patient information in a secure format — and encourage the exchanges to experiment and grow within their regions.

Over time, due to lack of funding and competitive pressures, some exchanges closed, and others have merged.

Now, the goal is for the HIEs eventually to be interconnected with health insurance companies through the Michigan Health Information Network.

Nationally, there are more than 250 health information exchanges, including 160 private exchanges, but less than 60 are exchanging data, and only 40 percent of those receive sufficient revenue to cover expenses, according to reports.

Eventually, all state exchanges are expected to interconnect to form a national health information exchange. However, information technology challenges and different operating systems have slowed development.